Securitized Products Group (SPG) Questions - MBS and CLO

Hi all,

I’m very interested in the Securitized Products Group (SPG). From what I understand, this includes ABS and its derivatives (MBS, CLOs, etc.) and falls more under the S&T side. I wanted to ask a few questions:

1) What is the impact of forbearance on the MBS market? From what I understand, Fannie and Freddie will guarantee payments for MBS investors on the secondary market, but without payments from the homeowners, wouldn’t they be in an insolvent position like in 08?

2) Leveraged loans are not doing well as companies have cash flow problems. What is your future view on the CLO market? WSJ article I just read: https://www.wsj.com/articles/what-we-talk-about-w…

Also, I’m having a few informational calls with alumni in this group, both sales and trading. What are some other topics that are of interest in the SPG space right now that I should know/ask about?

Thank you!

4 Comments
 

Prospect in PE - Other, bummer your thread hasn't had a response yet. Sometimes bots are smarter than humans anyways:

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I wouldn't say loans aren't doing well. We are basically at post COVID highs which is due to thr technical environment as CLO creation has picked up rapidly. 

IMO there are way too many CLO managers and an upcoming  downturn should wipe a few guys out who have no reason being around. CLOs are a great product going forward IMO

 

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